Research On The Causes And Preventions Of Audit Failure Based On Audit Process

In recent years,the number of administrative penalties issued by the SFC to firms and certified public accountants has become more and more frequent,which shows that more and more unfair and unreliable audit reports and the lack of diligence consciousness of certified public accountants,which will not only affect the judgment of investors,but also bring huge economic losses to investors.This is not conducive to the long-term development of the securities market.This paper will discuss what problems or behaviors exist in the audit process of accounting firms or CPAs,which will increase audit risk,ultimately affect the quality of audit and lead to audit failure.Finally,aiming at the problems of CPAs,the paper puts forward corresponding countermeasures and suggestions.Hope to play a certain role in maintaining market order,protecting the interests of relevant investors,and then enhance the credibility of CPAs and provide reasonable and appropriate guidance for the development of audit work.The audit process under risk-oriented audit generally includes five stages:accepting business entrustment,planning audit work,identifying and evaluating major misstatement risk,dealing with major misstatement risk and completing audit work.This paper divides the audit process of accounting firms into three stages:business acceptance stage,audit implementation stage and audit completion stage.The three stages of planning audit,identifying and evaluating major misstatement risk and dealing with major misstatement risk are grouped into the implementation stage of audit.By analyzing the cases of audit failure of the ShineWing Certified Public Accountant and Dengyun shares,we can find that the audit failure of Dengyun shares is not accidental,which is closely related to the audit behavior of certified public accountants,because in the three stages of auditing,there are the following problems:(1)business acceptance stage:insufficient understanding of the audit client;lack of independence;low threshold of auditing.(2)Audit implementation stage:not maintaining due professional prudence;not obtaining sufficient audit evidence;not implementing audit procedures in accordance with regulations.(3)Complete the audit stage:not strictly implement the quality control review process.Finally,aiming at the problems existing in the three stages of CPA firms and CPAs,corresponding preventive measures are put forward respectively.In the case selected in this paper,Dengyun Stock,as the representative of the traditional manufacturing industry with limited development,has many fraud risk factors at the stage of IPO and after listing,which has a certain representativeness.And in the audit process the mistakes existing in the Shine Wing Certified Public Accountant that many firms also will make,so this paper has a certain reference for the problems that firms should pay attention to when auditing such firms.The question to be studied in this paper is:how to prevent audit failure?By sorting out the problems of the Shine Wing Certified Public Accountant Accounting Firm and its certified public accountants in the stage of business acceptance,audit implementation and quality control review,then analyzes which actions increase audit risk and ultimately lead to audit failure.Finally,the paper puts forward specific measures to prevent related problems,so as to safeguard market order,protect the interests of investors,hope to restore the credibility of some CPAs in a certain extent,and provide some guidance for future CPAs to carry out audit work.This paper finds that in the three stages of audit,there are the following causes leading to audit failure:business acceptance stage:CPA undertook the audit business without fully understanding the auditee and its environment;did not maintain its due independence;reduced the threshold of accepting audit business under market competition;audit implementation stage:did not maintain due professional prudence.Failure to obtain sufficient audit evidence;failure to implement audit procedures as required,such as correspondence procedures and related party verification procedures;completion of audit stage:failure to effectively implement quality control review procedures.